To: Frank A. Coluccio who wrote (7646 ) 4/11/1999 11:28:00 AM From: Frank A. Coluccio Read Replies (3) | Respond to of 29970
---OFF TOPIC--- Are Web Communities doomed? See what AOL plans for NSCP's Netcenter, below. From Forbes: forbes.com -------------- "No More Free Ride for Web Communities" By Penelope Patsuris NEW YORK. 05:20PM EST—Today's announcement that Netscape is closing its Netcenter forums presages what's ahead for online communities. The problem is that the concept of community--that is, online spaces where individuals can meet and talk--is at the heart of the Internet's origins and interactive format but at the same time an albatross around the neck of any site that wants to make money. Community areas depend on advertising, the online prices of which are plummeting, spurring sites to look for more direct revenue streams like e-commerce. Still, these forums remain a must in drawing people into a site and getting them to click around, whether they're viewing ads or making purchases. So scratching the notion altogether is out of the question. Online communities, however, are very expensive to maintain. Costs range from servers and software to site promotion and content licensing. That's why the community space will see more of these pages reconfigured to become more cost-effective, which is what AOL (nyse: AOL) has in mind for Netcenter. "AOL has lots of experience in effectively allocating community resources," says Gartner Group analyst Mike West, "whereas Netscape's community mode was to pour money into it in order to build the feature out and get market share. I doubt that Netscape was going about this in the most cost-effective manner, while AOL is a profitable company that wants to see some economies of scale." Adding to the problem, Netscape was pouring money into the forums and had yet to create a critical mass of users. The company declines to reveal traffic numbers. "AOL probably looked at this and said, ‘We're paying this much for how many eyeballs? Forget it!'" says West. Netcenter forums will phase out over the course of this month and be reengineered and reintroduced, according to a company spokesman, "to build a more robust offering, leveraging the strength of both AOL and Netscape." Beyond that, as to which resources they're looking to leverage and how, they won't say. That's probably because they're not even sure yet. But you can bet that the relaunch will deliver a much better expense-to-advertising ratio. Expect to hear about similar initiatives from theglobe.com as well as Yahoo! (nasdaq: YHOO), the only portal that's profitable which just acquired two very unprofitable companies: GeoCities (nasdaq: GCTY) and Broadcast.com (nasdaq: BCST). "They've just announced a very positive quarter," says West. "But they've also taken on a lot of loss so they'll be looking for ways to streamline, especially GeoCities. They want to retain as many eyeballs as possible while offering them less." The idea is to hold all the users GeoCities brings to the table and get them to do more clicking, moving toward the site's commercial services. For chat and bulletin board fans, it may not be a beautiful day in the neighborhood.